Set up severance pay
This article explains how to set up severance pay for an employee who is being terminated.
You will create a payroll item for severance pay.
An employee has been terminated from your company and you have agreed to severance pay as part of the separation agreement.
To set up a new payroll item for severance pay:
Add a new payroll item.
Select Custom Set Up and click Next.
Select Wage Item and click Next.
Select Bonus (this allows for a flat amount of pay without requiring hours or a quantity and doesn't interfere with the salary amount).
Select the Expense Account and click Finish.
Create Severance Check
- Click the Employees drop-down menu.
- Select Pay Employees and click Unscheduled Payroll.
- Create the paycheck for the employee using the Severance Pay earnings item.